Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.

A second corporate raider is now making trouble for EQT and its planned purchase of/merger with with Rice Energy. In June, EQT and Rice Energy announced that EQT will buy out and merge in Rice Energy, to create (in EQT) the largest natural gas-producing company in the United States (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). A few weeks after the announced merger, so-called “activist investor” (i.e. corporate raider) Jana Partners, in league with the Cohen family (Atlas Energy) started a proxy fight to block EQT’s takover/merger with Rice Energy (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Instead of buying Rice, Jana is demanding that EQT split itself into two companies–upstream (drilling) and midstream (pipelines). Jana is now joined by a second group, a group that holds 4% of EQT’s outstanding stock–D.E. Shaw Group. Shaw is headed up by former Elliott Management head and corporate raider Quentin Koffey. As a reminder, raiders buy enough stock to get themselves a seat or two on the board of directors, so they can force a company to sell assets and fire people to drive up the price of the stock, lining their pockets because the raiders then sell the stock after the price goes up, moving on to the next target. Disgusting. And now Shaw, perhaps in league with Jana, is ganging up on EQT. So it’s no surprise that EQT has had to respond by issuing a statement that they’ve “accelerated” the timeline to explore the issue both Jana and Shaw are demanding–that the company split itself in two–upstream (drilling) and midstream (pipelines). That will, according to the money-grubbing raiders, “unlock shareholder value” (i.e. make them rich). Below we have EQT’s announcement, which came a day before Shaw sent the company a letter and a presentation (also below) that supposedly outlines how splitting EQT in two is best for everyone. At least Shaw is not demanding EQT pull out of the Rice Energy deal, as Jana is doing…

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